Tag: worries

The impact of tumultuous geopolitical affairs on global growth is one of the biggest concerns for the president of the World Economic Forum (WEF). Speaking to CNBC on the eve of this year’s forum in Davos, Switzerland, WEF President Borge Brende said geopolitical conflicts could damage global growth. “There are many things that concern me but I would say that those geopolitical conflicts can, if not handled the right way, can have a negative impact on growth,” he told CNBC’s Hadley Gamble on Sun

The impact of tumultuous geopolitical affairs on global growth is one of the biggest concerns for the president of the World Economic Forum (WEF).

Speaking to CNBC on the eve of this year’s forum in Davos, Switzerland, WEF President Borge Brende said geopolitical conflicts could damage global growth.

“There are many things that concern me but I would say that those geopolitical conflicts can, if not handled the right way, can have a negative impact on growth,” he told CNBC’s Hadley Gamble on Sunday.

“We’re already seeing a slowing of global growth with the negative impact that will have on a lot of people around the world, also when it comes to creating jobs. We’re not out of the woods when it comes to jobs, for example in Europe many countries are still facing 20 percent youth unemployment,” he noted.

U.S. government debt prices rose on Thursday amid worries over China’s economy and Brexit uncertainty,The yield on the benchmark 10-year Treasury note fell to 2.718 percent, while the yield on the 30-year Treasury bond dipped to 3.064 percent. Bond yields move inversely to prices. The news came after comments from the Chinese state planner and Premier Li Keqiang suggested the country would inject more stimulus amid concerns of a slowdown in economic growth. Recent data has shown signs of weaknes

U.S. government debt prices rose on Thursday amid worries over China’s economy and Brexit uncertainty,

The yield on the benchmark 10-year Treasury note fell to 2.718 percent, while the yield on the 30-year Treasury bond dipped to 3.064 percent. Bond yields move inversely to prices.

On Wednesday, China’s central bank made its biggest ever daily net cash injection via reverse repo operations, pumping $82.73 billion into the banking system. The news came after comments from the Chinese state planner and Premier Li Keqiang suggested the country would inject more stimulus amid concerns of a slowdown in economic growth.

Such concerns appeared to weigh on investor sentiment Thursday. Recent data has shown signs of weakness in China’s economy, a sensitive issue as Beijing tries to resolve its trade dispute with the Trump administration over the course of a 90-day tariffs truce. The two countries have targeted each other’s economies with new duties on billions of dollars’ worth of imports.

After years of U.S. companies taking advantage of low interest rates to pile up cheap debt, Wall Street is beginning to take notice of a problem forming. Corporate debt outstanding ended 2018 at just over $9 trillion, a 64 percent increase over a decade’s time, according to the Securities Industry and Financial Markets Association. The result has been a trickle of warnings from financial experts that the price tag for all that debt is coming due. The high-yield end of the bond market has been on

After years of U.S. companies taking advantage of low interest rates to pile up cheap debt, Wall Street is beginning to take notice of a problem forming.

Corporate debt outstanding ended 2018 at just over $9 trillion, a 64 percent increase over a decade’s time, according to the Securities Industry and Financial Markets Association. The surge came as the Federal Reserve kept its benchmark interest rate anchored near zero and allowed companies to reward shareholders, do deals and invest in their own operations.

However, credit quality is showing signs of weakening, with heavily indebted companies already feeling the pinch as the Fed raises rates gradually and global economic conditions start to weaken.

The result has been a trickle of warnings from financial experts that the price tag for all that debt is coming due.

The latest admonition comes from Jeffrey Gundlach, founder of DoubleLine Capital, who said in a warning published over the weekend that the debt load is about to become a bigger problem.

“We are talking about the creation of an ocean of debt,” Gundlach told Barron’s in a roundtable discussion, during which he noted that the Fed is engaging in “quantitative tightening” that will create “a problem for the stock market.”

Others have echoed the same point — Steve Eisman, immortalized in the Michael Lewis book “The Big Short” and now a portfolio manager at Neuberger Berman, recently told the Financial Times he is worried about liquidity issues in the bond market that could create a problem should conditions deteriorate and there is a sudden wave of sellers.

The high-yield end of the bond market has been on a roller coaster lately. Issuance dried up at the end of 2018, but the sector has been strong in the new year. The iShares iBoxx $ High Yield Corporate Bond ETF, a proxy for the junk market, is up about 3.2 percent in 2019.

However, there are broader longer-range concerns about the $1.2 trillion high-yield market, as well as BBB-rated companies that are threatening to teeter into junk status.

Moody’s notes that investor protection, as measured through the strength of bond covenants, continues to hover around its weakest levels. The rating firm also noted that no corporate bonds priced in December, the first time that has happened since it began tracking covenant quality in 2011.

Gundlach, whose firm was managing more than $120 billion as of June 30, said he has “a lot of concern about bond supply and spending.”

On a broader level, though, he does not see the economy falling into a recession this year, though he believes stocks have been acting like they’re in a bear market.

“I’m not looking for a terrible economy, but an artificially strong one, due to stimulus spending,” he said. “I expect the market to fall further. I see almost a reverse of last year, in that stocks could be weak early in 2019 and stronger later in the year.”

Market focus is largely attuned to economic data, amid escalating fears of a sharper-than-expected slowdown in global growth and corporate profits. It comes after official data from China on Monday showed imports fell 7.6 percent year-on-year in December, while analysts had anticipated a 5 percent rise. The news appeared to reinforce worries that U.S. tariffs on Chinese goods were starting to take a heavy toll on China’s cooling economy. That’s because British lawmakers are poised to vote on Pri

Market focus is largely attuned to economic data, amid escalating fears of a sharper-than-expected slowdown in global growth and corporate profits. It comes after official data from China on Monday showed imports fell 7.6 percent year-on-year in December, while analysts had anticipated a 5 percent rise.

Meanwhile, the country’s exports unexpectedly dropped 4.4 percent, defying projections of a 3 percent gain. The news appeared to reinforce worries that U.S. tariffs on Chinese goods were starting to take a heavy toll on China’s cooling economy.

U.S. West Texas Intermediate (WTI) crude futures dropped 7 cents, or 0.1 percent, to $52.52 per barrel. Despite Friday’s price falls, Brent and WTI are set for weekly gains of more than 7 and 8 percent respectively. A key reason for the emerging glut was the United States where crude oil production soared by more than 2 million barrels per day (bpd) in 2018 to a record 11.7 million bpd. Consultancy JBC Energy this week said it was likely that U.S. crude oil production was already “significantly

Traders said the declines came on lingering concerns over the health of the global economy.

“If we experience an economic slowdown, crude will underperform due to its correlation to growth,” said Hue Frame, portfolio manager at Frame Funds in Sydney.

Most analysts have downgraded their global economic growth forecasts below 3 percent for 2019, with some even fearing a looming recession amid trade disputes and spiralling debt.

For now, however, there is hope that the trade war between Washington and Beijing may be resolved as global markets, including oil, took heart from talks between the two sides this week.

Despite Friday’s price falls, Brent and WTI are set for weekly gains of more than 7 and 8 percent respectively.

Beyond global economics, oil markets are receiving support from supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) aimed at reining in a glut that emerged in the second-half of 2018.

A key reason for the emerging glut was the United States where crude oil production soared by more than 2 million barrels per day (bpd) in 2018 to a record 11.7 million bpd.

Consultancy JBC Energy this week said it was likely that U.S. crude oil production was already “significantly above 12 million bpd” by January 2019.

Given the overall supply and demand balance, Swiss bank Julius Baer said it was “price neutral” in its oil forecast.

“We see the oil market as well balanced into the foreseeable future, as the petro-nations make space for further U.S. shale production growth,” said Norbert Ruecker, head of commodity research at the bank.

The safe-haven yen weakened versus the dollar on Friday on hopes upcoming U.S.-China trade talks would make some progress, but broader market confidence remained weak amid worries over slowing global growth. Market sentiment perked up after China confirmed that trade talks with the United States will be held at the vice ministerial level in Beijing on Jan. 7-8. The yen weakened 0.5 percent to 108.18 while riskier currencies such as the Australian dollar gained 0.2 percent to $0.7020. The Fed rai

The safe-haven yen weakened versus the dollar on Friday on hopes upcoming U.S.-China trade talks would make some progress, but broader market confidence remained weak amid worries over slowing global growth.

Market sentiment perked up after China confirmed that trade talks with the United States will be held at the vice ministerial level in Beijing on Jan. 7-8. Trade tensions between the world’s two largest economies had rattled financial markets for most of 2018.

The yen weakened 0.5 percent to 108.18 while riskier currencies such as the Australian dollar gained 0.2 percent to $0.7020.

“Sentiment has shifted slightly towards the positive side, which is why we are seeing the yen weaken while Aussie dollar is rising,” said Margaret Yang, markets analyst at CMC Markets.

However, fears of a sharp slowdown in economic growth and a failure of the trade talks are likely to keep investors from diving back into riskier assets in a big way in the coming weeks.

Weaker-than-expected U.S. factory activity has heightened investor expectations the Federal Reserve will not raise rates in 2019, and possibly even cut them in 2020. Data has also been weak out of China and Europe.

Spooked by signs of fresh troubles in the world’s largest economy, investors rushed to the safety of bonds. The U.S. two-year Treasury note yield dropped below 2.4 percent on Thursday, reaching parity with the federal funds effective rate for the first time since 2008.

The Fed raised rates four times in 2018 on the back of strong growth and a robust labour market. However, with financial conditions tightening, most analysts now do not expect the Fed to raise rates in 2019.

Indeed, interest rate futures markets are now fully pricing in a rate cut by April next year.

In an interview with Bloomberg on Thursday, Dallas Fed President Robert Kaplan acknowledged issues such as the deceleration of global growth, tightening of financial conditions and widening credit spreads.

“My own view is we shouldn’t take any further action on interest rates until these issues are resolved for better or for worse…,” Kaplan said.

“So I would be an advocate of taking no action during the first couple of quarters of this year…we should be patient and give some time for this economy and watch how this situation unfolds.”

A dovish Fed would likely keep the greenback under pressure in the coming months, giving central banks in emerging markets room to cut rates if economic conditions sharply deteriorate.

“A weaker dollar should benefit emerging market currencies, but for now they are hamstrung by all the uncertainty around China,” said Ray Attrill, head of currency strategy at NAB.

The dollar index was relatively unchanged at 96.3. The index fell 0.56 percent in the previous session.

The euro and sterling were unchanged from Thursday’s close at $1.1393 and $1.2636, respectively.

Gold prices scaled a more than six-month peak on Thursday as worries about a global economic slowdown and volatility in equities boosted safe-haven buying, while a weaker dollar offered support. Spot gold touched its highest since June 15 at $1,292.32 per ounce, and was up 0.4 percent at $1,289.10 at 0819 GMT. “The weaker dollar lent some support for gold. The Japanese yen, also a preferred asset during times of economic volatility, surged versus the U.S. currency on Thursday. Investor appetite

Gold prices scaled a more than six-month peak on Thursday as worries about a global economic slowdown and volatility in equities boosted safe-haven buying, while a weaker dollar offered support.

Spot gold touched its highest since June 15 at $1,292.32 per ounce, and was up 0.4 percent at $1,289.10 at 0819 GMT.

U.S. gold futures were up 0.6 percent at $1,291.20 per ounce.

“The weaker dollar lent some support for gold. People are more interested in gold as the stock markets are under pressure and are looking at gold as a safe haven,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

The dollar index fell over 0.2 percent. The Japanese yen, also a preferred asset during times of economic volatility, surged versus the U.S. currency on Thursday.

The market is also awaiting a closely-watched survey on U.S. manufacturing due on Thursday, followed by the December payrolls report on Friday.

Meanwhile, the Australian dollar-denominated gold hit a record high on Thursday at A$1,894.02 after the currency, often considered a gauge of global risk appetite, fell to its lowest level since 2009 in early Asian trade.

Gold pushed higher as investors looked for a safe-haven due to brutal moves in the Australian dollar, MKS PAMP Group traders said in a note.

“Australian producers were slow to realise the move but have since been seen consistently selling, taking advantage of the very bullish move.”

Investor appetite for gold has reflected in the rise of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund. SPDR holdings rose about 1 percent to 795.31 tonnes on Wednesday.

Among other precious metals, palladium gained 0.9 percent to $1,265.74 per ounce.

Silver was up about 0.5 percent at $15.58 an ounce, while platinum rose 0.3 percent to $796.60 per ounce.

The yen surged across the board, reserving some of its biggest gains against the traditional high-yielding currencies favoured by domestic retail investors such as the Australian dollar and the Turkish lira. The dollar collapsed to as low as 104.10 yen, an eye-watering drop of 4.4 percent from the opening level of 108.87 and the lowest reading since March 2018. It was last trading around 107.54 yen, down 1.2 percent on the day and poised for the biggest daily fall since November 2016. The yen’s

The yen rocketed higher on Thursday and is poised for its biggest daily rise in 20 months as growing concerns about the health of the global economy, particularly China, sent investors scurrying into the safe-haven of the Japanese currency.

The yen surged across the board, reserving some of its biggest gains against the traditional high-yielding currencies favoured by domestic retail investors such as the Australian dollar and the Turkish lira.

The break of some key technical levels in early Asian trading on Thursday triggered some massive stop-loss sales, forcing investors to unwind some of their large short yen trades against the dollar and quickly cascading into other currencies.

The dollar collapsed to as low as 104.10 yen, an eye-watering drop of 4.4 percent from the opening level of 108.87 and the lowest reading since March 2018.

It was last trading around 107.54 yen, down 1.2 percent on the day and poised for the biggest daily fall since November 2016. At session lows, it has fallen more than 6.5 percent in the last five trading sessions.

While the early slide was triggered by news of a rare cut in sales forecast by Apple in its latest quarter, citing slowing iPhone sales in China, the selling quickly gathered momentum in illiquid markets, with Japan still on holiday after the New Year.

“The sharp drop in risk sentiment fueled by weaker PMI data in China and Europe and Apple’s warning has contributed to the sharp overnight move in the yen,” said Valentin Marinov, head of G10 FX research at Credit Agricole based in London.

The yen’s surge against the dollar also pushed it higher against other major rivals such as the pound and the euro against which it rose 1.8 percent and 0.9 percent respectively.

Market watchers say the yen’s surge may have further room to run as Japanese investors have made a beeline for overseas assets, particularly U.S. equities, in recent months on an unhedged basis and the yen rise would force them to cover some of their short positions.

Elsewhere, the dollar was down 0.3 percent against a basket of its rivals at 96.56 while the euro rose 0.3 percent to $1.1372.

Gold held steady on Monday as equities gained on likely progress in Sino-U.S. trade standoff, but bullion prices were heading for their first annual decline since 2015, losing to the dollar mostly on trade worries and higher interest rates. Spot gold was steady at $1,281.23 per ounce as of 0815 GMT, near a six-month high of $1,282.09 it hit on Friday. Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure. Gold dropped over 15 percent from a

Gold held steady on Monday as equities gained on likely progress in Sino-U.S. trade standoff, but bullion prices were heading for their first annual decline since 2015, losing to the dollar mostly on trade worries and higher interest rates. Spot gold was steady at $1,281.23 per ounce as of 0815 GMT, near a six-month high of $1,282.09 it hit on Friday. Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure. Gold dropped over 15 percent from aGold set for first annual decline in three years Cached Page below :Company: cnbc, Activity: cnbc, Date: 2018-12-31Keywords: news, cnbc, companies, gold, sinous, ounce, trade, gained, dollar, metal, interest, worries, set, decline, steady, annual

Gold held steady on Monday as equities gained on likely progress in Sino-U.S. trade standoff, but bullion prices were heading for their first annual decline since 2015, losing to the dollar mostly on trade worries and higher interest rates.

However, the precious metal was on track for its best month since January 2017, having scrambled back from sharp declines in the year due to volatility in equities and a subdued dollar, along with worries over slowing global growth.

Spot gold was steady at $1,281.23 per ounce as of 0815 GMT, near a six-month high of $1,282.09 it hit on Friday.

U.S. gold futures were near flat $1,283.4 per ounce.

“The trade war concerns between the U.S. and China is slightly cooling down and that has lent support to the equity market,” said Ajay Kedia, director at Kedia Commodities in Mumbai, adding that there is some profit booking in gold ahead of the year-end.

China’s President Xi Jinping said on a telephone call with U.S. President Donald Trump on Saturday that he hopes to push forward a Sino-U.S. relationship that is coordinated, cooperative and stable, Chinese state media reported.

The dollar index has gained 4.6 percent this year as the U.S. currency had been the preferred safe haven this year as the U.S.-China trade conflict unfolded against a backdrop of higher U.S. interest rates, denting gold’s demand.

Higher interest rates make gold less attractive since it does not pay interest and costs to store and insure.

Gold dropped over 15 percent from a peak of $1,365.2 in April to a 1-1/2-year low in August this year to $1,159.96. The yellow metal has gained nearly 10 percent since then.

“Over concerns of a slowdown of global economic growth and rate hike, gold is likely to recover the loss since mid-June and rise back to the trading range between $1,300 and $1,350,” Wing Fung said in a research note.

Among the precious metals, palladium gained 0.1 percent to $1254.30 per ounce and has been the best performer this year, surpassing gold for the first time since 2002 on strong demand from autocatalyst makers amid production shortages.

The metal rose 18.3 percent in the year and was set for a fifth consecutive month of gains.

Silver rose 0.4 percent to $15.40 per ounce in the session. However, it declined over 9 percent in the year.

Oil prices fell to their lowest in more than a year on Thursday, a day after their biggest one-day rally in two years, pulled down by worries about the global economy and a supply glut. “For the time being, the stock market and the oil market will echo each other,” said Ahn Yea-Ha, commodity analyst at Kiwoom Securities in Seoul. “Global economic slowdown worries have been weighing on stock market movements, and oil prices are not free from those concerns.” Stephen Innes, head of trading for Asi

Oil prices fell to their lowest in more than a year on Thursday, a day after their biggest one-day rally in two years, pulled down by worries about the global economy and a supply glut. “For the time being, the stock market and the oil market will echo each other,” said Ahn Yea-Ha, commodity analyst at Kiwoom Securities in Seoul. “Global economic slowdown worries have been weighing on stock market movements, and oil prices are not free from those concerns.” Stephen Innes, head of trading for AsiOil prices jump, but oversupply worries persist Cached Page below :Company: cnbc, Activity: cnbc, Date: 2018-12-28Keywords: news, cnbc, companies, crude, oversupply, day, worries, output, market, million, persist, oil, global, barrels, jump, prices

Oil prices jumped as much as 3 percent on Friday to win back a chunk of the ground they lost in the previous session, but growth in U.S. crude stockpiles and ongoing concerns about the global economy kept markets under pressure.

Brent crude was up $1.18, or 2.26 percent, at $53.34 a barrel at 0219 GMT, having earlier risen as much as 3.1 percent. It dropped 4.24 percent, or $2.31, the day before to settle at $52.16 per barrel.

U.S. West Texas Intermediate (WTI) crude futures, were at $45.62 a barrel, up 2.26 percent, or $1.01, after earlier rising 3.6 percent. They ended Thursday down 3.48 percent, or $1.61, at $44.61 a barrel.

Oil prices fell to their lowest in more than a year on Thursday, a day after their biggest one-day rally in two years, pulled down by worries about the global economy and a supply glut.

“For the time being, the stock market and the oil market will echo each other,” said Ahn Yea-Ha, commodity analyst at Kiwoom Securities in Seoul.

“Global economic slowdown worries have been weighing on stock market movements, and oil prices are not free from those concerns.”

Asian stocks edged up on Friday after U.S. shares extended gains for a second straight day.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore, said crude prices had been pressured by slowing economic growth “coupled with the expectation of strong U.S. production in the new year”.

U.S. crude inventories for the week to Dec. 21 rose by 6.9 million barrels to 448.2 million barrels on increased refinery output, according to data released on Thursday by industry group the American Petroleum Institute. The U.S. Energy Information Agency (EIA) releases its official report on Friday.

“If the EIA’s data shows a rise in U.S. crude inventories, that would cap price gains,” Ahn said.

The United States has emerged as the world’s biggest crude producer, pumping 11.6 million barrels per day (bpd), more than both Saudi Arabia and Russia.

Meanwhile, Russian Energy Minister Alexander Novak said on Thursday that rising protectionism and the unpredictability of the U.S. administration had greatly contributed to global oil price volatility over the past two years.

Novak also said Russia would cut its crude output by between 3 and 5 million tonnes in the first half of 2019 as part of a deal between producers

Earlier this month, the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, agreed to curb output by 1.2 million bpd starting in January in a bid to clear a supply overhang and prop up prices.